India’s exports of engineering goods have reported a sharp fall sequentially of 14.60 per cent in November, , according to the engineering exporters’ body EEPC India, which has sought support from the Government.
Shipments to key markets such as the US did not keep up with their earlier trend.
Though engineering exports showed an year-on-year increase of 14.72 per cent in November , “what is causing more concern is that they have declined month-on-month as compared to October this year, raising doubts whether recovery which began in the second quarter of this fiscal can be sustained,” said EEPC India Chairman Anupam Shah said.
Liquidity continues to be a big issue for exports. Pending claims of refund of service tax, duty drawback and rebate claims continue to affect exports. At present, out of 118 ports drawback claims to the tune of Rs 4,821 crore are pending in 103 ports, as against normal pendency of Rs 1,000 crore or less.
In the Chennai port alone, drawback claims worth Rs 802 crore are pending, said Rafeeque Ahmed, President of the Federation of Indian Export Organisations (FIEO).
Ajay Sahai, CEO of FIEO, pointed out that though the general forecast is that 2014 would be a better than 2013, the global situation continues to be fluid.
“There are few green shoots and the situation is bound to continue to remain uncertain in 2014. The US has posted recovery with unemployment rate of less than 7 per cent and increase in consumer spending, but the housing market and business spending have slowed down,” he said.
He pointed out that the EU was still trying to come “out of the woods” and its GDP grew by 0.1 per cent in the third quarter over the previous quarter. FIEO said it was concerned with the instability in the Middle East and North Africa and legal disputes with many governments of Latin America.
The engineering export basket generated $4.78 billion in November, compared with $5.6 billion last year. Though exports had risen in October, the momentum could not be maintained in November, given the slide in several key sectors like gems and jewellery and petroleum products.
Officials said the trend in engineering exports is similar to the country’s overall exports. In November, the growth of India’s total exports of merchandise goods eased to a five month low of 5.86 per cent to $24.6 billion.